September 2014 Flash Report

Second quarter US GDP was revised up to 4.6%, marking the fastest growth since 4Q 2011. The upbeat data was driven by strong retail sales and rising exports. Consistent with this growth, the FOMC announced plans to normalize monetary policy and released forecasts of the Fed Funds rate by its members that confirm the economy is squarely mid-cycle in the business cycle. Against this backdrop of fundamental progress, however, complacent markets reacted strongly to geopolitical events, expectations of rising rates, and stretched valuations by selling off across the board.